The decision is expected later today. In November, inflation rose for the second consecutive month to 2.6%, far above than the Bank’s target of 2%. The central bank’s Monetary Policy Committee (MPC) has to carefully balance helping a struggling economy with managing pricing pressures.<\/p>\n\n\n\n
The cost of living has been steadily rising, according to the most recent statistics, driven by rising prices for necessities like groceries and electricity. Official data indicates that November’s inflation rate of 2.6%<\/strong> is significantly higher than October’s rate of 2.3%<\/strong>, and it is well above the Bank’s 2%<\/strong> target.<\/p>\n\n\n\n
Higher costs in industries like live entertainment, transportation, and basic foods like butter and eggs are some factors causing this increase. The Bank of England<\/a><\/strong>‘s mission to guide the economy <\/a>toward price stability is made more difficult by these hikes, which put additional strain on household budgets.<\/p>\n\n\n\n
Wage growth in the UK has also outpaced expectations, rising by 5.2%<\/strong> annually in the three months leading to October. This trend adds pressure to rising prices, as higher wages typically drive consumer spending, potentially fuelling further price hikes.<\/p>\n\n\n\n
On the other hand, recent GDP data <\/strong>revealed a decline in October, reflecting weakening economic activity. This dual dynamic\u2014strong wage growth offset by slowing output\u2014adds complexity to the Bank of England\u2019s decision-making process.<\/p>\n\n\n\n
Paul Dales of Capital Economics remarked that the November inflation figure leaves little room for an early interest rate<\/a> cut. His analysis suggests that while inflation may moderate slightly in December, sustained pressures could delay any reduction in borrowing costs until well into next year.<\/p>\n\n\n\n